Investing in a New World: The Rise of China & State Capitalism

How can investors evaluate opportunities in a world where state capitalism is gathering steam and China is a global economic superpower? Indranil Ghosh explores the nuances of global investing in a world marked by the rise of China and a new hybrid model of state capitalism. Dr. Ghosh unpacks a new toolkit for investors, which he has been contemplating since his years at Bridgewater Associates and Abu Dhabi’s sovereign wealth fund. Filmed on May 16, 2018 in London.

Comments

With all due respect to Dr. Ghosh, my take away is that he is advocating for a one World Government which would dictate who gets to be rich and who doesn't. His 7 aspects are unattainable given that countries such as China, Russia, Saudi Arabia, Iran, et al would not concede one iota of control for the comings and goings in their respective countries. As to state capitalism, investing in a country where your money and the flow of it is controlled by the country's government is not a country I, for one, would invest in! The fact that many countries are giving themselves over to state control is troubling. Thomas Jefferson said " A government that is powerful enough to provide you with your every need is a government powerful enough to take it all away." And we should give ourselves over to this sort of tyranny??? Who is deluding who?

Amazing how many words this guy used without saying anything. Seriously, nothing pragmatic or actionable in any way. Should have known when I saw he had a PhD.
Govts cannot provide freedom, freedom is being free from a govt providing you freedom.

If you are interested in investing in SE Asia, the video is worthy of watching, particularly the first half. The rise of state capitalism is extremely relevant as one looks at markets like China or smaller countries like Vietnam. If other SE Asia countries follow in China's path, then this will impact markets for one of the most rapidly growing areas on the planet.
With that said, the video was a little too "big picture" for me when he started discussing his book and the seven paths to prosperity. Not they are not relevent principles, but a more high level view of world economies and governments. But in going back to the rise in state capitalism, it is an interesting subject to explore for investors particularly as one tries to navigate the Chinese market and its impact on other countries' markets.

I don't understand many of the comments and negative votes. It is not my impression that he is necessarily advocating state capitalism, he is just describing where he sees the world going. Whether that fits with our individual preferences doesn't matter; the question is whether that's accurate or not, and I think it is to a large extent (even in the West - see the rise of populism and demand for state intervention), and how to adapt to that changing environment. I would agree that the interview is pretty light on the latter, apart from vague broad principles, and that's a shame, but overall that's an interesting perspective. Whether one likes state capitalism or not is quite irrelevant.

Cyril, you may have misinterpreted some of the comments below.
I couldn't care less whether a country is run by one or more parties. But I take a lot of issue with this video. "State Capitalism" is used in in a most amusing context, vague in meaning and a red herring.
Consider:
1) Autocratic governance and closed markets
2) Autocratic governance and free markets
One is good, the other is not. Neither have anything to do with whether a government has one or more parties. We've seen evidence already it makes no iota difference.
The interview trends towards political ideology compared to finance, trade and investment. Which I thought RealVision was all about.

State capitalism - also known as corporatism a.k.a. Mussolini style fascism. RV - Lets start a free market revolution, otherwise the future is bleak.
Three-fourths of the Italian economy, industrial and agricultural, is in the hands of the state. And if I dare to introduce to Italy state capitalism or state socialism, which is the reverse side of the medal, I will have the necessary subjective and objective conditions to do it.
Mussolini’s speech to the Chamber of Deputies on May 26, 1934.

This man is obviously not an idiot, but the communists/ marxists/ socialists of times past would have called him a “useful idiot”. What he describes is capitalism for those at the top, socialism for those at the bottom. Thankfully, he references 1984. These systems have been proven over and over again not to work, and lead millions to misery. In the case of China, let’s make that billions.

Watched this earlier today and have been contemplating what this reflective young man is saying. What he is saying is that that he sees a resurgence of more authoritarian, populist, command and control economies. This strikes at the heart of what I believe to be the best way forward and leaves a sour taste in my mouth. But if you back up and look at all the corruption vis a vis CEO's levering up with debt to boost their stock prices so they can exit whole, what is happening in politics in the US and globally, the acceleration of the wealth gap and Global Central Bank policies that are not only enabling but driving it forward, and many many other things, not to mention the fundamentals in demographics that are putting irresistible and unovercomable strains on social contracts globally that will be broken.. this is how we have gotten to where we are. It is one thing to ask yourself do you like what this fella is saying. It is altogether another to ask yourself is it true. A third thing you might find yourself asking yourself is where can you come for the truth. Thank you Real Vision.. for the truth.. Be it as it may unpalatable. Ignore the trends, the truth, and the implications are your own peril. If you want a temporary dopamine boost to make you feel better... CNBC is currently still around.

Paraphrasing but close to the mark: "One of the things we'll need to do is to be responsible".
Another: "we'll need to think about how investing will be thought about..."
Definitely on par with Dee Smith stuff...

Ground breaking interview on the same scale as Dee Smith's original interview on Hyper-Connectivity. It is difficult to see how other forms of government can work for its citizens. At one time the USA was a radically new form government developed and evolved from the English/European Enlightenment theoretical models. Most leaders in England and Europe could not see how it could possibly succeed. It has, however, been successful for several hundred years. This does not mean that the same system will work everywhere for everybody. Dr. Ghosh is not trying to change our mind about our system but open our minds to alternative systems and understand them to diversify our investments. If we wish to invest in China, Russia, Italy, Africa, etc., we need to understand how other world economies and societies work! Thank RealVision TV. DLS

State capitalism, LOL. A new word in order to describe communism and authoritarian regimes. Sorry but I didn't learn anything from this interview in respect of financial idea or advice like the most of the videos here.

1/4: How does one not understand a market can be both authoritarian and free? They are not mutually exclusive. 2/4: "State controlled" is used so frequently in this video that I'll officially be using it as a buzz word and proxy for charlatan moving forward. 3/4: Is he insinuating China is not free or meritocratic? 4/4: An interview showcasing how political agenda and ideology can blind side one's investing thesis

Your comments were well received by 18/0 of your peers at this time. For me this is about investment methodology that is fundamental. We have had many interviews by very smart, experienced investors on foreign investments that have not worked out. One reason may be these investors are looking at investments in China or elsewhere like they were investments in the US. If you wish to invest only in the US then you may be OK. If you wish to invest in developing markets this video may help you. Good luck in either case. DLS

Hang on there Chairman Mao! So you’re saying people around the world are gravitating to strong personalities like Putin in Russia, Erdogan in Turkey, Maduro in Venezuela, El Salvador, Nicaragua perhaps Cuba? I mean you got me there who wouldn’t want to gravitate towards those beacons of security and prosperity type of leaders?

The FDR presidency centralized much of the US economy, something Wilson tried during WWI but failed at the polls in 1920. After the war in vietnam Pres Carter (and maybe Ford) started deregulation. So 50 yrs from now you might see China attempting the equivalent of deregulation. I wonder what will happen if China ever has to confront uncooperative religious groups. The first signs of this are the repression of the Falun Gong and Muslim central asians. China trying to unify with Taiwan sounds like a mistake to me because the Taiwanese are used to a high degree of religious freedom.